AHLA. WW. DMEPOS Supplier Practice Tips from Enrollment to Payment. Jana Kolarik Anderson Foley & Lardner LLP Jacksonville, FL

Transcription

1 AHLA WW. DMEPOS Supplier Practice Tips from Enrollment to Payment Jana Kolarik Anderson Foley & Lardner LLP Jacksonville, FL Institute on Medicare and Medicaid Payment Issues March 26-28, 2014

2 Jana Kolarik Anderson, Partner Foley & Lardner LLP One Independent Drive, Ste Jacksonville, FL Agenda 1. Key Terms/Concepts in Medicare DMEPOS 2. Enrollment 3. Licensure and Documentation Issues Affecting Payment 4. OIG & CMS Laws and Guidance Affecting Structure and Referral Arrangements 5. Government Enforcement Increase/Compliance Safeguards 1

3 What is DMEPOS? DMEPOS includes the following Durable medical equipment (DME) equipment furnished by a supplier or HHA that (1) can withstand repeated use, (2) is primarily and customarily used to serve a medical purpose, (3) generally is not useful to an individual in the absence of illness or injury and (4) is for use in the home. Examples blood glucose monitors, hospital beds, nebulizers, oxygen delivery systems & wheelchairs. Prosthetics devices that replace all or part of an internal body organ, e.g., cardiac pacemakers, cochlear implants, electrical nerve stimulators, and parenteral and enteral (PEN) nutrition. 2

4 What is DMEPOS? DMEPOS includes the following Orthotics and prosthetics leg, arm, back & neck braces (orthotics) and artificial legs, arms and eyes (prosthetics). Surgical dressings include dressings and splits, casts and other devices used for the reduction of fractures and dislocations. Other items include therapeutic shoes for diabetics, home dialysis supplies and equipment, self care home dialysis support services and institutional dialysis services and supplies and self administered erythropoietin. Billing DME MACs There are 4 DME Medicare Administrative Contractors (or DME MACs) they administer claims from DMEPOS suppliers. MMA (2003) requires that CMS must re compete MACs every 5 years. Region A NHIC Corp. Region B National Government Services/NGS Region C Cigna Government Services (CGS) Administrators Region D Noridian Administrative Services 3

5 DME MAC Table Copied from CMS, DME MAC Jurisdictions, available at Medicare Contracting/Medicare Administrative Contractors/DME MAC Jurisdictions.html DME MAC Map 4

6 Payment During a Part A stay, DMEPOS is not separately billable. Under Part B, DMEPOS is typically paid under a fee schedule. The Pricing, Data Analysis & Coding (PDAC) contactor (formerly known as the SADMERC) conducts coding verification and pricing of DMEPOS items. With the exception of customized items, a fee schedule amount is calculated for each item/category of DMEPOS that is identified by a code in the Healthcare Common Procedure Coding System (HCPCS). Competitive Bidding Program DMEPOS Competitive Bidding Program was statutorily mandated and was intended to begin in After a delay and an eventual termination of Round One contracts, CMS launched the first phase of Medicare's competitive bidding program in 9 areas of the country for 9 products (the Round One Rebid) in

7 Competitive Bidding Program Round One Rebid Results CMS received 6,215 bids from 1,011 suppliers during 60 day bidding period. CMS awarded 1,217 contracts with 356 suppliers. Small suppliers (with annual receipts less than $3.5 million) make up 51% of contract suppliers. CBIC estimates overall weighted average savings as 32% Round Two Began late 2011 and was expanded from 70 to 91 MSAs and a total of 100 CBAs CMS received 48,424 bids from 2,641 suppliers CMS awarded 13,128 contracts to 799 suppliers Small suppliers make up about 63% of the contract suppliers CBIC estimates an average of 45% for certain DMEPOS items scheduled to begin on July 1, 2013 and an average of 72% on diabetic testing supplies under the national mail order program. Competitive Bidding Program Round 2 Products Oxygen supplies & equipment Standard power wheelchairs, scooters and related accessories Mail order diabetic supplies Enteral nutrients, equipment and supplies Continuous positive airway pressure devices (CPAPs), respiratory assist devices (RADs) and related supplies and accessories Hospital beds and related accessories Walkers and related accessories Support surfaces Negative pressure wound therapy pumps and related accessories 6

8 Enrollment Basics Create NPI through National Plan and Provider Enumeration System (NPPES) Enroll with the National Supplier Clearinghouse (NSC) website Medicare Application CMS form 855S NSC site visit will occur pre and post enrollment Separate PTAN/billing number for each location (except locations used solely as warehouse/repair facilities) 7

9 Enrollment Basics All of the following enrollment requirements must be in place prior to/on date of enrollment: Applicable licensure (which may be productdependent); Accreditation by one of 10 approved accreditation organizations, unless exempt (must comply with Quality Standards); Surety bond(s); Application fee paid through PECOS system; Meet all Supplier Standards (See 42 CFR (c).) Enrollment Basics Accreditation As noted in the prior slide, DMEPOS suppliers choosing to obtain/ maintain Medicare billing privileges must submit accreditation documentation to NSC. Those suppliers exempt from accreditation are: Suppliers providing drug and pharmaceuticals only Physicians, including dentists Audiologists Optometrists Orthotists Prosthetists, including occularists Opticians Occupational therapists Physical therapists Exempt suppliers are reminded that accreditation exemptions only extend to the normal scope of services for the supplier specialty. Any products or services provided outside the normal range of services will require accreditation to obtain/maintain Medicare billing privileges. 8

10 Enrollment Basics Site Visits As noted in the prior slide, DMEPOS suppliers will get a pre and, at some point, a post enrollment site visit. Site visits are unannounced and will take place during your posted hours of operation. Supplier Standard 30 requires the location must be in operation for a minimum of 30 hours per week unless exempted by supplier type. If a site inspector comes to your location outside of the posted hours of operation, the inspector will attempt a subsequent site visit during the posted hours. If, during the second attempt, a site inspector reports the facility is not open for business or could not complete the visit during the posted hours of operation, a denial shall not be issued. If a new enrollment, the applicant will receive a letter stating a site visit was unable to be conducted and informing the applicant to submit a new application at such a time when a site inspection can be completed. If you are an existing supplier, the supplier number may be revoked. Enrollment Basics App Fee Application fee 2014 application fee is $542 (increased by CPI U each year) Submit an application for the following New enrollment, Revalidation, Reactivation, New practice location Payment can be made at 9

11 Enrollment Basics Supplier Standards Enrollment Basics Focus on Certain Supplier Standards Supplier Standard #7 Physical facility Supplier must maintain a physical facility on an "appropriate site." An "appropriate site" must meet the following Maintain a practice location that is at least 200 square feet Is in a location accessible to the public, Medicare beneficiaries, CMS, NSC and its agents Is accessible and staffed during posted hours of operation Maintains a permanent visible sign in plain view and posts hours of operation Is in a location that contains space for storing business records Is in a location that contains space for retaining the necessary ordering and referring documentation 10

12 Enrollment Basics Focus on Certain Supplier Standards Supplier Standard #29 A supplier is prohibited from sharing a practice location (as that physical location is described on the CMS 855S) with any other Medicare supplier/provider except in the following circumstances: Physician/NPP furnishing items to his/her patients as part of his/her professional service; PT/OT furnishing items to his/her own patients as part of his/her own professional service; DMEPOS supplier is co located with and wholly owned by an enrolled Medicare provider where DMEPOS supplier operates as a separate unit and meets the Supplier Standards Enrollment Changes Effective 3/25/2011, newly enrolling DMEPOS suppliers are classified in the "high" risk category of fraud, waste or abuse under the CMS enrollment standards, while previously enrolled DMEPOS suppliers were classified in the "moderate" risk category. Risk categories determine what screening procedures "Limited" risk verification of provider/supplier specific requirements in the FHCPs, verification of licensure, and database checks. "Moderate" risk all "limited" risk procedures PLUS unannounced preand post enrollment site visits "High" risk all "moderate" risk procedures PLUS fingerprint based criminal history record check of Federal and State law enforcement databases. (This standard has not yet been implemented.) Medicaid and CHIP programs will adopt same standards OR can add screening procedures or increase the risk level for categories of providers/suppliers. 11

13 Enrollment Issues Change of Ownership A stock deal that does not change the tax identification number/tin of a supplier is not a "change of ownership" ("CHOW") for purposes of the Medicare enrollment rules. In a stock deal, a change of information filing including relevant sections of the 855S must be submitted to update the file. An asset purchase, consolidation or merger, changing the TIN of the supplier, would be considered a CHOW, triggering a new application/new number. Simply put, whether there is a change in the tax identification determines whether there is a CHOW/new number required. Enrollment Indirect Owners Many organizations that directly own a provider are themselves wholly or partly owned by other organizations (or even individuals). This is often the result of the use of holding companies and parent/ subsidiary relationships. Such organizations and individuals are considered to be indirect owners of the provider. For example, if Company B owned 100% of Company A, Company B is considered to be an indirect owner of the provider. In other words, a direct owner has an actual ownership interest in the provider (e.g., owns stock in the business, etc.), whereas an indirect owner has an ownership interest in an organization that owns the provider. 12

14 Enrollment Example Indirect Owners Company A owns 100% of the enrollee so is the 100% direct owner REPORT Company C owns 60% of Company A which owns 100% of the enrollee, so multiply 100% by 60% = 60% indirect ownership of the enrollee REPORT Company B owns 40% of Company A which owns 100% of the enrollee, so multiply 100% by 40% = 40% indirect ownership of the enrollee REPORT Individual X owns 5% of Company C which indirectly owns 60% of the enrollee, so multiply 60% by 5% = 3% DO NOT NEED TO REPORT Individual Y owns 30% of Company B which indirectly owns 40% of the enrollee, so multiply 40% by 30% = 12% REPORT 13

15 Licensure DMEPOS supplier licensure is changing. States which previously did not license DMEPOS suppliers now require licensure. Use the NSC's licensure database at as a resource, but a good rule of thumb is that if the NSC's database does not state that you need to be licensed for a particular product, you should check each individual state's laws (statutes/regulations) and agency guidance to determine whether a license/permit or registration is required. Medicare/Medicaid/other payors require proper licensure for payment, so if you are not properly licensed, payors can (and do) make the argument that the payment was not owed. Licensure The agencies that are typically involved in DMEPOS licensure are the Boards of Pharmacy or the state's equivalence of the Department of Health, but there could be another agency involved, e.g., Texas Board of Orthotics and Prosthetics. IMPORTANT TIP Although it may seem like an obvious point, ensure that you check licensure upon application. As stated previously, state licensure is in flux, so what may have been good guidance 4 months ago, may not be good guidance now. 14

16 Documentation Pointers Generally, you will refer to the following resources for documentation requirements Medicare Claims Processing Manual, ch. 20 (DMEPOS), sections 100 (general documentation requirements), 120 (ABN) General Rules DME MAC Supplier Manual by Jurisdiction, which provides information on Physician Orders Certificates of Medical Necessity (CMNs) and DME MAC Information Forms (DIFs) Medical Necessity Documentation Proof of Delivery Requirements Advanced Beneficiary Notice (ABNs) Specific Item Rules LCDs/Policy Articles Documentation Pointers Specific Issues State law can affect the documentation that you obtain. Oxygen is a drug according to the FDA. As such, it requires a prescription by a State authorized prescriber. For Medicare coverage purposes, a CMN (CMS 484) will need to be completed for oxygen to be covered. The Oxygen CMN notes the "Est. Length of Need (# of Months): 1 99 (99 = LIFETIME)." State law may require renewals of oxygen prescriptions. As such, although the physician may have noted a lifetime need for oxygen on the CMN, you will need to obtain prescription renewals if required under State Law. 15

17 Documentation Pointers Medical Records Medicare Claims Processing Manual, ch. 5 (DMEPOS), 5.7 (Documentation in the Patient's Medical Record ) (also in the DME MAC Supplier Manuals) "For any DMEPOS item to be covered by Medicare, the patient s medical record must contain sufficient documentation of the patient s medical condition to substantiate the necessity for the type and quantity of items ordered and for the frequency of use or replacement (if applicable). The information should include the patient s diagnosis and other pertinent information including, but not limited to, duration of the patient s condition, clinical course (worsening or improving), prognosis, nature and extent of functional limitations, other therapeutic interventions and results, past experience with related items, etc. If the information in the patient's medical record does not adequately support the medical necessity for the item, you are liable for the dollar amount involved unless a properly executed ABN of possible denial has been obtained. See the Advanced Beneficiary Notice section below for information about ABNs.. The documentation in the patient s medical record does not need to be routinely sent to you or to the DME MACs or ZPICs; however, the DME MAC or ZPIC may request this information in selected cases. If the DME MAC or ZPIC does not receive the information when requested, or if the information in the patient s medical record does not adequately support the medical necessity for the item, then for assigned claims you are liable for the dollar amount involved unless a properly executed advance beneficiary notice (ABN) of possible denial has been obtained. " 16

18 Stark Law "Designated health services" or "DHS" under the Stark Law includes (among other things) Durable medical equipment (DME); parenteral and enteral nutrients, equipment and supplies; prosthetics, orthotics and prosthetic devices and supplies; and outpatient prescription drugs. Stark Law The Stark Law provides that "a physician who has a direct or indirect financial relationship with [a DHS] entity, or who has an immediate family member who has a direct or indirect financial relationship with the entity, may not make a referral for the furnishing of DHS for which payment otherwise may be made under Medicare." Further, an entity that furnishes DHS pursuant to a prohibited referral may not present or cause to be presented a claim or bill to the Medicare program or to any individual, third party payer, or other entity for the DHS performed pursuant to the prohibited referral. 17

19 Stark Law In order to avoid the Stark Law s referral prohibitions, if the physician has a "direct or indirect financial relationship with [a DHS] entity" the financial relationship must meet an applicable exception. "Financial relationship" means (i) a direct or indirect ownership or investment interest (as defined by 42 C.F.R (b)) in any entity that furnishes DHS or (ii) a direct or indirect compensation arrangement (as defined by 42 C.F.R (c)) with an entity that furnishes DHS. Stark Law The Stark Law applies not only to relationships between third party DMEPOS suppliers and physicians, which must meet an exception, but also to a physician's referrals within his/her physician practice entity. Under the Federal physician self referral law (commonly known as the "Stark Law"), physicians and physician group practice entities may furnish DHS pursuant to the "in office ancillary services" exception. 18

20 Stark Law The types of DME that may be furnished under the IOAS exception are limited: (1) DME infusion pumps or (2) canes, crutches, walkers and folding manual wheelchairs, and blood glucose monitors that meet certain conditions. Note: For purposes of the in office ancillary services exception, an item is "furnished" in the location where the service is actually performed upon a patient or where an item is dispensed to a patient in a manner that is sufficient to meet the applicable Medicare payment and coverage rules. Stark Law IOAS Exception The services must meet the following conditions: 1. Who GENERALLY, they must be furnished personally by one of the following individuals: (i) the referring physician; (ii) a physician who is a member of the same group practice as the referring physician; (iii) an individual who is supervised by the referring physician or, if the referring physician is in a group practice, by another physician in the group practice, provided that the supervision complies with all other applicable Medicare payment and coverage rules for the services. Special DME Rule: DME is restricted in that it may only be furnished personally by the physician who ordered the DME, by another physician in the group practice or by an employee of the physician or the group practice. 19

21 Stark Law IOAS Exception Where 2. Items must be furnished in one of the following locations: (i) the same building (as defined at ), but not necessarily in the same space or part of the building, in which all of the conditions of 42 C.F.R (b)(2)(i)(A), (B) or (C) are satisfied; (ii) a centralized building (as defined at ) that is used by the group practice for the provision of some or all of the group practice's clinical laboratory services; or (iii) a centralized building (as defined in ) that is used by the group practice for the provision of some or all of the group practice's DHS (other than clinical laboratory services). Special DME Rule: DME must exclusively be furnished in the "same building". Stark Law IOAS Exception 3. How Billed They are billed by one of the following: (i) the physician performing or supervising the service; (ii) the group practice of which the performing or supervising physician is a member under a billing number assigned to the group practice; (iii) the group practice if the supervising physician is a "physician in the group practice" (as defined at ) under a billing number assigned to the group practice; (iv) an entity that is wholly owned by or by that physician's group practice under the entity's own billing number or under a billing number assigned to the physician or group practice; or 20

22 Stark Law IOAS Exception 3. How Billed (continued) They are billed by one of the following: (v) an independent third party billing company acting as an agent of the physician, group practice, or entity specified in subsections (i) through (iv) under a billing number assigned to the physician, group practice, or entity, provided that the billing arrangement meets the requirements of 42 C.F.R (b)(5). Note: With regard to the billing requirements, a group practice may have, and bill under, more than one Medicare billing number, subject to any applicable Medicare program restrictions. Special DME Rule A physician or group practice that furnishes DME must meet all DME supplier standards set forth at 42 C.F.R (c). Federal Anti kickback Statute Whoever knowingly and willfully solicits or receives [or offers or pays] any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind... in return for referring [or to induce a referral] or in return for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any good, facility, service or item for which payment may be made in whole or in part under a Federal health care program... shall be guilty of a felony and upon conviction thereof, shall be fined not more than $25,000 or imprisoned for not more than five years, or both. 42 USC 1320a-7b(b). 21

23 Stark Law v. AKBS Stark Law Regulated by CMS Prohibits referrals where a financial relationship exists Civil penalties only Strict liability Applies only to physicians Mandatory exceptions Anti kickback Statute Regulated by OIG Prohibits payments intended to induce referrals/other business Criminal and civil penalties "Intent" Applies to anyone who offers/gives, requests/accepts remuneration in exchange for a referral/other business "Voluntary" safe harbors AKBS Considerations Supply Closets The OIG has had longstanding concern regarding space rental arrangements in physician office space. "Consignment closets" (also called "supply closets") have been specifically mentioned in OIG guidance. Concern is that such arrangements are a disguised kickback from a supplier to a physician/group practice for referrals of DMEPOS items. Arrangements should be structured to meet the AKBS rental safe harbor and the Stark Law's rental of office space exception, as well as the Supplier Standards. 22

24 Government Enforcement 2014 OIG Work Plan focuses on DMEPOS suppliers' compliance with payment requirements. 23

25 Government Enforcement The first Medicare Fraud Strike Force (Strike Force) was launched in March 2007 as part of the South Florida Initiative, a joint investigative and prosecutorial effort against Medicare fraud and abuse among Durable Medical Equipment (DME) suppliers and Human Immunodeficiency Virus (HIV) infusion therapy providers in South Florida. The Strike Force teams are composed of CMS, FBI, OIG and Criminal Division's Fraud Section and the USAOs. Strike Forces use advanced data analysis techniques to identify high billing levels in health care fraud hot spots so that these teams can target emerging or migrating schemes along with chronic fraud by criminals masquerading as health care providers or suppliers. Based on the success of these efforts and increased appropriated funding for the HCFAC program from Congress and the Administration, DOJ and HHS expanded the Strike Force to include teams of investigators and prosecutors in a total of nine locations Miami, FL; Los Angeles, CA; Detroit, MI; Houston, TX; Brooklyn, NY; South Louisiana (South Louisiana and New Orleans, LA); Tampa, FL; Chicago, IL; and Dallas, TX. Government Enforcement Examples Listed in the HCFAC 2013 Report and OIG Website In October 2012, in the Middle District of Louisiana, an executive of a Mississippi corporation that purportedly provided durable medical equipment to Medicare beneficiaries was sentenced to 72 months in prison and ordered to pay $3 million in restitution on his October 2011 guilty plea in connection with a $9.1 million Medicare fraud scheme. According to court documents, the defendant admitted that from October 2004 through October 2010, he and others conspired to defraud Medicare through the submission of false and fraudulent claims, and by concealing the submission of those claims and the receipt and transfer of the fraud proceeds. The proceeds were diverted to their own personal use or benefit of others. In May 2013, an owner/operator of several durable medical equipment (DME) companies in Nevada was sentenced to 4 years and 3 months of incarceration and ordered to pay over $12 million in restitution after pleading guilty to charges of health care fraud and tax evasion. According to the indictment, the owner/operator paid marketers in Southern California to obtain patients for her various DME companies. The marketers provided patients with money in exchange for their Medicare information, which was used to bill Medicare for items not provided. The owner/operator also forged or caused to be forged prescriptions and falsified or caused to be falsified certificates of medical necessity to make it appear as if a physician had ordered a product for her customers. She then submitted and caused to be submitted false claims to Medicare for DME that was not medically necessary, was not provided to her customers, and was not prescribed by a physician. Columbia, South Carolina May 16, 2013 United States Attorney Bill Nettles announced that the government reached a settlement with RS Medical for $1,214, to resolve claims that employees of RS Medical in South Carolina and Illinois submitted claims to Medicare for Transcutaneous Electrical Nerve Stimulation (TENS) Units, conductive garments for TENS Units, back braces, cervical traction systems, muscle stimulators, and custom fit knee braces (collectively the durable medical equipment ) that (1) lacked physician orders; (2) lacked the required supporting documentation; and/or (3) lacked medical necessity. Washington, DC Four Leaf Clover, Inc. (FLC), a diabetes supply company, Team Tech Solutions, Inc. (TTS), a telemarketing company, and their owner executives have agreed to be excluded from participation in Federal health care programs the Office of Inspector General (OIG) of the Department of Health and Human Services announced today. These actions follow an investigation into telemarketing and billing practices and reflect OIG's ongoing efforts to combat durable medical equipment (DME) fraud and enforce guidance issued to the DME industry. In January 2010, OIG issued a Special Fraud Alert warning DME suppliers and telemarketers that they may both be liable for engaging in prohibited marketing activities. OIG alleged that the companies and their executives violated the Civil Monetary Penalties Law by paying and receiving kickbacks and causing the submission of false and fraudulent Medicare claims for DME resulting from illegal telemarketing. Specifically, OIG alleged that FLC contracted with TTS to make unsolicited calls to Medicare beneficiaries and paid TTS for each Medicare beneficiary referred for diabetes supplies. OIG also alleged that these beneficiaries (1) were new customers, (2) did not have an established relationship with FLC, and (3) did not request in writing to be contacted regarding FLC's DME equipment. 24

26 Compliance Safeguards OIG Compliance Program Guidance for DMEPOS suppliers was published in the July 6, 2009 Federal Register and is on the OIG's website ( OIG has issued several guidance documents fraud alerts/special bulletins that apply to DMEPOS suppliers Special Fraud Alert, Telemarketing by Durable Medical Equipment Suppliers (2003, rev. 2010) Special Advisory Bulletin, Contractual Joint Ventures (2003) Special Fraud Alert, Rental of Space in Physician Offices by Persons or Entities to Which Physicians Refer (2000) Special Fraud Alert, Joint Venture Relationships (1989, reissued 1994) Compliance Safeguards If you are in the process of developing a compliance program, start your compliance program with a Code of Conduct and a Compliance Officer. Identify your company's risk areas e.g., sales agent marketing and develop policies and procedures around those risk areas. Top Down Compliance Make it known throughout the organization that compliance is taken seriously and that reports of compliance issues will be addressed and no retribution will be taken against good faith reporters. Develop a reporting system Audit and monitor do not assume that because you have a "paper" program that you are protected. You must ensure that the words on the paper translate into compliant behavior. This means auditing behaviors e.g., sales agent marketing as well as auditing claims/supporting documentation. If something seems wrong, do not do it. If you are unsure about whether something is compliant, talk to your attorney. 25